cyberattacks

Personal Cyber Insurance: What Is It and Do You Need It?

An insurance policy may help you recoup costs if you fall victim to cybercriminals

NBC Universal, Inc.

Since the pandemic started, we’ve all been spending a lot more time on our phones and computers. And that means even more opportunities for cybercriminals to find their way into our digital lives. All it takes is one click on the wrong link, and you could be out thousands of dollars.

They’ve become common headlines: data breaches, ransomware attacks, even cyberbullying.

These cybercrimes can cost you thousands and identity theft insurance only covers so much.

But there’s a new option you may want to consider that offers more protections called “personal cyber insurance.”

Jason Metz is an Insurance Analyst at Forbes Advisor. He recently researched and wrote about personal cyber insurance, also known as “cyberattack insurance.” He says the policies can protect you from attacks like ransomware.

“If you look at the FBI’s data over the last 5 years, a 300% increase in ransomware, that’s not probably going to change anytime soon,” Metz said. That’s about 4,000 ransomware attacks a day.

For example, if hackers are able to get into your computer, and you pay them to recover your files, then your policy may reimburse you for those costs. 

“It helps you recover from things like viruses you get on your computer, identity theft, data breaches, some policies help you with cyberbullying,” Metz said.

Some policies may even pay you back for money lost in scams, something banks don’t typically reimburse.

“Say if you gave $2,000 to a charity and later find out that it was fake, you would file a claim and your claims handler would look into it and if it covered by your policy you would be reimbursed for that loss,” Metz said.

The policies are usually an add-on to your homeowners or renters insurance, and the cost can be minimal. Talk to your insurance agent about your options, and as always, read the fine print.

Of course, the best protection is prevention, so here are 4 ways to keep your digital life secure.

  • Make sure your anti-virus software and operating system are up-to-date
  • Don’t store credit card numbers online
  • Use unique, secure passwords and two-step authentication
  • Backup your computer to an external hard drive often
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